NIE 13-2-59 - PRESENT TRENDS IN COMMUNIST CHINA

Created: 2/10/1959

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NATIONAL INTELLIGENCE ESTIMATE

NTTRENDS IN COMMUNIST CHINA

DIRECTOR Of CENTRA I. INTtUJQKNCf

Thi foUontne inttlllgeneitlcfpated tn UM preparation of (fill aUmalf The Control InUirkftmcehe iittiUvein orgenlsatmni of th* Department! of State, the Arm. Ihi Say. thi Airnd The Jatot Staff.

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CKKTRAL INTHUJGESCE AOIKCY

DISSEMINATION NOTICI

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he title of this estimate, when used separateJyterVRhculd be classified:

present trends in communist china

THE PROBLEM

TO assess the significance of tbe "treat leapnd tbe communeand their interrelation with the question of Mao Tse-tung's leadership. Sino-Soviet relations, and Chinese Communist foreign policy.1

CONCLUSIONS

The Chinese Communist "gnat leap forward" program has been based largelyrodigious ear^diture of man power. Although it Is difficult to make precise assessments of Chineseclaims, it it our preliminarythat remarkable Increases tnhave actually occurredn agriculture the Increase was at leastnd possibly as much aaercent. Industrial production In some sectors such as steel, coal, and machine tools may have been nearly double thatlthough tiic quality of some of tbe added output Is probably poor and of limited usefulness The preaent year will almost certainly see another substantialIn total production. The rate of advance will probably not be sustained

'Tbeee qaeeUxu will ako be laoee tramtn more detail in um* (preaenur scheduled for Jun*fter move time, data, end analysts have baea browsM to bear then prwnt clremsatancaa permit The JudaaitiiU In tha preaent MIS moat olBy beapaeekthw and preaeatnarj In rsatare.

after IBM, however, aa some of tbe human and economic problems generated In this frenzied period begin to take effect

Almost the entire countryside has been organised, in varying degrees, intoWe believe that tbe recent party directive modifying the communeIncluding tho postjwnement of city communes, largely reflects the need for consolidation before pushing forward again. Although there has beenadverse popular reaction, tbere is little evidence of overt resistance. We believe that tbe regime's strong system of controls and demonstrated flexibility will enable Peiping to avoid either ablood bathorced retreat from the communal eaperiraenL

Mao Tse-tung's announced intention to resign his position as Chairman of the government has occasioned considerable speculation as to his poaltlon in the party. However, we believe his decision was not the result of any party disapproval of bis

leadenhip but wu motivated, as officially announced, by his desire to concentrate his efforts upon policy problems andtheory. As Chairman of the party be wUl still be number one man In the country.

the leap forward andprogrami have caused some sew

frictions in Sino-Soviet relations, these frictions are highly unlikely to threaten Sino-Soviet solidarity against the West-em world.

is no firm evidence as to theInterrelation of Communistandoth appear to bea drive to speed upproceaaea Althoughestimated that thethe crisis In the Taiwan Straituseful in rallying the people toforward and commune programs,not believe that this wu theIn activating the crisis.

he US and ORC response and world reaction during the offshore Islands crisis may have had some tempering effect on Peiping's general foreign policy thinking, less stress Is being given to the alleged weakness of the US and more emphasis placed on the "pearefuT" andnature of Chinese aims and policies in Asia. These considerations by no meansorceful Chinesemove, especially om tn response to scene target of

here has already been some adverse Asian reaction to the social costs of the leap forward and commune program* If these programs fail dismally,will tend to be discredited In Asia, and Communist China's ability to Influence other Asian governments will be reduced. However, anything shortajor failure in these programs will still leave the regime in the position to exert heavy pressure on its neighbors. If these programs succeed, fuar ofChina will grow In South and Southeast Asia, thus making It moreto prevent small neighboring states such as Cambodia and Thailand fromto Chinese CommunistSuccess will significantlythe confidence ofeaders in their ability to press rapidly toward their goals, both domestic and foreign, and will strengthen their belief that bask Communist principles provide the only guide to those goals.

DISCUSSION

WTROOUCTrON

The dramatic events of the past year tn Communist China may have greater long-term significance for Chinas ckmestfc and foreign policies and for its role In the Bloc than any other ttameetlc development since the Ccrnmunlst acquisition of power

The already rapid pace of economic devei-content wis suddenly greatly acceleratedgreat leap forward" program whichuller mobllisalloti of Communist China's vast, underdeveloped labor potential. This involved important modifications In Itseconomic pattern, which wis originally based on the Sovietar-reaching social monition was undertaken which In scope and audacity dwarfed prevtous Com-raunlst efforts In Chins or elsewhere and sought to create the commune as the primary

of economic, political, and socialof the state. These vast programs were accompanied by assertive ideological claims, greater manifestationeneral truculence In foreign policy which included the Initiation of the serious crisis tn the Taiwan Strait.he year it was announced that alao Tse-tung. while remaining head of the party,to step down from his past asof the government

The urueatialned and almost explosive manner In which the leap forward movement and especially the organisation of thedeveloped cameurprise to the world. In the years8 the regime had achieved considerable success with Its various programs- Control over most of the country had been firmly established; the goals of the First Five-Yearad generally been met or exceeded; ONP had been increased at an average rate ofear, organnatlon Into ruraland the socialisation of industry and trade had been accomplished with speed and relative ease; Pelplng's special status and important role In the Bloc bad beenand China's position in Asia had been greatly strengthened While some economic and pcaitkai difficulties bad etnerged8he potential for economic growth appeared favoiable and there was no serious threat to the regime's aLabillty. To men less ambitious than Felplng'i rulers this general record of successful achievement might haveontinuation of established and proved policies.

Instead, the past year produced radical Innovations- Though moderated somewhat at year's end. these innervations highlight Chinese Communist leadership's serkxisness with respect to Communist doctrine, theto push forward In "urimtarruptednd the eeUbllshrnent of aindustrial economy. If the leap forward and commune Innovations succeederiod of time, they could transform Chinaeorge Orwell Ian society andCommunist China's progress towarda major world power.

HE "GREAT LEAP FORWARD" AND THE COMMUNE* MOXMAMS

A. Motivation* for These Programs

t& Tht Laap PonoartL The principal source of thai arobiUooa program was almosta growing -belief within the Chinese Communist leadership that the existing fiamewurk of economic planning was not achieving optimum results, despite rapid gains In some fields. This belief apparently developed7 as the regime waswith dislocations resulting from theeconomic programhe party was alsoeans ofthat its slogan ot "relying no thetrongly emrhasised during7 rerrtaScaUon campaign, could be translated Into concrete results.

rom7 re-examination of theplans, tbe regime apparentlythat the doctrinaire pattern ofalmost exclusively upon iheof large-scale heavy Industry put excessive demands upon Chinas Importand technology and prevented the most productive use of China's rescnireea In the absence of substantial Soviet loans1 and with evident limitations on export production and markets. It was clear that the regime could greatly Increase its domestic investment onlyrogrammaller proportion of imported resourcea4 Though

'Also see Annex on eocnmanea.

'Past Soviet economic assistance was small In com partto China's vast needs and consisted of repayable loans and guaranteed delrerlea for buae-ecale projects rather than elfu. Stace UM tbe Srno-ao*Wt trade balances have shown mora goods satof laK than to CMna aa The earlier Soviet loans were beirej peM back. Ton neaat that the CtJneat net ooiy had to mate their ownor domesticbat bad lo have saasMt sarpruses toein order to par forehroed and for debt serncaasj

'A new Seats* ecoaorate agreement was stsnedrortdins 'or tbe sale to China of teehrieal eervtm and equipment to the extentillion dollars for the periodflei, to be paid (or by Chineaehisontinuation ol tbe IftSB level 'TooUwU continued on

the regime continued to fester the growth of heavy Industry through giving priority for available Imports and for the output of the domestic capital goods Industry, tt stmul-taneoualy poured great energyassive mobilisation of rural labor for the expansion of agricultural production and theof local Industry.

The planner! also recogrdsed thatproduction was the gnat testthat had developed in tha First Fife-Tear Flan We estimate that it bad increased aboutercent. Just about keeping pace with China's swelling population- The regime had found it difficult to expand itsexports and to provide an ever grriwing supply of food and agricultural raw materials to the city. Moreover, in the face oftrends and limited farm resources, tbe ghost of Mai thus had arisen to haunt the planners. At tbe same time they wereIncreasingly convinced that anlabor effort was the only way toagricultural production until they could afford to augment greatly the supply of chemical fertilisers and agricultural

Preliminary manifestations of the new mass-labor approach to these problemsto appear toward the endn September the party stated that far greatergricultural production could and must be made. Great laboreople) were organ-reed to spend their rebsUvcly Idle winter days on vast rural programs, Irrigation InColumns of city workers, students, and other "volunteers" spent manyeek In rural tasks, such as digging ditches and collecting organic fertiliser. There wudiscussion of tbe possibility oflocal Industrial effort

(Footnote continued fromf Soviet deliveries or technical equipment and services, but, when compared with China'scapital Investment program, olio augsresu that China will be relatively less dependent en Soviet deliveries and technical advice thanIbe First Five-Year plan period.

8 economic plans announced In February were still surprisingly modest However, as the results of the winter and spring drives became apparent, the regime showed mounting confidence and by the time of the party Congress to May the leadership officially launched the "great leap forward" calling tor "greater, faster, better, and more economical" productionassive propaganda campaign was begun to kindle the enthusiasm of the party and people,with fcyperoptimistlc slogans such as "let one day equaleap forward production goals, wmettraes raised tolevels, began to appear in rapid succession.

To Implement the newprogram. It was necessary to findof organization that would cutconfining boundaries of theandnit stronggenerate its own capital and utilizeman power with6 onward there hadexperiments In groupingInto larger units, and antoward such amalgamationsa fewhe springunit In Honan, subsequently namedcommune, was citedodellater commune drive. Theof the new forn of organization were:the Agrlcultur al Producers'of one httang (township) were(b) the hiving government wasthe commune management andof virtually every activity,or otherwise, within Its area;f private ownership was furtherby expanding the scope of(d) children were placed Inor schools and meals were eatenhalls, thus releasing the womenduties to take part In the(e) workers were organized alonglines and deployed to the fields or

experiments apparentlyparty leaders that Ihey had at lastmeans cf organization which fully employed

China's laboreven that of children and Ihe agedwhichthe ecceuaruC needs generated by the leap forward undertakings. Accordingly, the intensive drive to orgauuse tha country Into communes was suddenly launched in

Ideological cDOtlvatkms almost certainly also played ar. important part lo theof the communal experiment. The rectification campaign? had indicated that there was scene feeling among Chinese Communist leaders that the revolution was losing momentum andignificant new step toward ewnrmmlitm was needed. The radical concept of the comrnnne In one stroke hastened tbe achievement of socialism and even introduced some aspectsuresociety. ThU may haveompulsive need for Ideological advance byew impetus lo the social

Moreover, the central nation of alleconomic, and social authorityingle admlmatrativt unit and the mib tarriedof all the members greatly ease the problem of continuous surveillance and physical control of every individual. The mass mllltla system within the communes abets these processes. The collective living aspects of tha commune hasten the break-up of the family, tbe only remaining LnsUtuUOn thai can compete wtth the State and party for loyalty. Finally, the communal system Of care and control of the dusen frompermits continuous Indoctrination, and thus facilitates the regime's goals ofeneration that Is "red and expert" and of eventually molding the ChineseIn the image of "Communist man"

The strategic dispersal Implications of the ercnomic and political decentralisation Inherent in the commune system have also motivated Peiping. The Chinese Communist press has explicitly stated that the nation wHI be lees vulnerable to disruption under the new organisation should war come.

B. Developments to Dote In the Leap Forward and Commune Programs

Tht leap ronoartL Although It bdifficult as yet to give preciseof Communist Chinas productiont Is our preliminary Judgment that remarkable Increases in production haveoccurrede believe that In agriculture the production Increaselthough far short of claims, Is at leastercent and possibly as muchhile aided by good weather, such an Increaseingle year, considering the already Intensive cultivation practiced in China, can also fairly be called aIn Industrial output the physical volume may In roost cases approach the pub-hahed claims, butconsiderable part of tbe increased production of such com nsodi ties as machine tools, steel, and coal Is probably of poor quality and limited usefulness

We believe that Communist China'sparticularly with respect tohave suddenly deteriorated during the past year. Foremost among the probable causes would seem to be the tremendousupon all echesCos to meet sptrabing targets and the ardent desire of the leaders to prove to the world that cosrannmlam In China Is leaping In addition, thestatistical work involved in reporting the leap forward probably Involved many new Inexperienced personnel and new alalistlcalnd the reporting from theof primitive, local Industries roust have been highly irregular. These problems were further complicated by the sweepingchanges introduced by the commune

prog rain during the peek productive season. Lastly,believe that party leadere feel that production figures must demonstrate that earlierloomier" (If more realistic)have no place In Communist China's new and compulsive more forward

he.y early Novemberclaimed thatercent of the ruralhad been organized Intoaveraging0 households each. The available evidence Indicates that the actual degree of communal organization achieved by that ume ranged from little more than that of paper reorganisation atBrave New World" sort ofat thewith people living in barracks, the children reared by theand food, clothing, and most othersupplied by the state. As ofowever, we believe that there Isevidence to support the judgment that few of the communes are presently at either of these extremes. In any event the apparent speed of com in urtalization is more credible when It le creanceredubstantial part of the organisational base already existed The Ansae unit into which the APC's wereto form the commune was already In existence and various types of cooperation among the APCa and othersiang had already begun ln

2ft, The exosestTely radical features of some communes have been moderated by theParty directive of6 calling upon the overeager organisers to take-it-easy with theirheand subsequent editorials have also warned tha communes not to push toodopting the "free supply" method ofand have ordered that there be some parental choice regarding the education of thelower push towards barracks living, law overwork and more steep,eneral correction of errorsuses This pattern of an extremist push, followederiod of adjustment andn ts the usualhinese Ceenmiirast campaigns: It la probably misleading to read thsphaseign of weaknesshange of heart by tbe regime.

he first, tentative efforts to establish communes in the cities ran Into more serious problems The sheer mechanics of cctanbahg the complex, interdependent urban society into even pertly self-sufficient unite ofsizetss8tBlBpJ Inthere was apparently strong resistance on the part of the city dwellers, which caused the Communist press to complain of "stub-bora rernnants of bourgeoisesult of tbeae difficulties, Pelping hasthe program for city communes.

he raodiOcations decreed tn December reflect, by the regime's admission,popular dissatisfaction and passiveTo help cope with the problem of popular attitudes, the party has slowed down the implementation of some of the moresocial measures and has undertaken ancampaign of "socialist education" of the peasantry. These djfthruitjes, however, do not appear to have been of sufficientto constitute any major hazard to the regime or Its commune program.

C. Outlook9

his year will probably see anothertn productionittle short of the achievementshe full mobillratioc of labor, effective overartin continue throughout the year, and some of the leas productive programs, Including the marginal small Industries, will be dropped. Agricultural output will fall far abort of stated goals but still may increase significantlyreasonably goodf the9 goals may actually be approached. Industrial output will be boosted as new plants continue to come Into production, and fight industry, mwill benefits high level of Industrial crops.

t ta likely, however, that serious newwill develop during tha year. Tbe chief Ingredient In the remarkable upswinghe reserve ofman power.been about exhausted; there ta presently do such remainingreservoir of man power. Moreover, even the Chinese may not be able or willing

e c

to continue the phrenetic pace of late IBMoaalbillty perhaps el ready re-Sealed in the Decernber modifications of the communes and the expressed concern for Bachight hoursay. The regime will face serious problems* In allocating and distributing the rapidly Increased output, and furthertrains will develop tn the overloaded transportation system. Further difficulties will arise from qualitative defects tnproduction and shortage ofand technical skills. These may In part be compensated forontinuance af the remarkable ImprorisaUori and local Initiative that have been displayed in the past year, but the Chinese Communlats probably will not be able to maintainate of growth.

he Inflated statistics8 aregoing to cause trouble for the Chinese Communist leaden by the endhe problem will be particularly acute In egrkul-ture, where0 goal for basic food crops is almost half again as much as IBM'sachievement which In turn supposedlyroduction. The apparentof reliable statistics and the frequent changes In production goals raise seriousas to Conununiat China's ability to make an economic plan which will not result Inexcesses in certain sectors and shortages in others, furthermore. It will undoubtedly be difficult torogram of limiting consumption In the face Of the claimed large Increases In food production

onsolklatloa of the commune system will continueome of the extremes may be moderated, and some accommoda lions will probably be made to practicality and local conditions, but the regime will almostattempt to continue to press this basic program without major change. Recognising the magnitude of the program and theof this initial parted, the party willdevote much effort toward making the communes function as smoothly and ef-flclentiy as posalbk). While problems will

prooktns will be discussed In detail in me is-as.

continue, we believe that the regime willbe successful In containing Itscourse.

here will probably be sporadic activeta nee, considerable passive resistance,ariety of new political and sociological problems The commune programopular reaction that was partially responsible for the regime's stowing the pace before the end of the year, and the attack on the traditional family system may prove to be the most aenalliTe aspect of the communal revolution. However, this attack has been going on forecade and past experience shows that Perpangood sense of what the traffic will bear and will probably continue to endeavor to adjust the pace so as to arold serious disaffection. Olven this flexibility and tha regime's controls, we do not anticipate that there wul be sufficient nationwide resistance to causelood hathorced retreat from the communal

HI.SC-TUNO'S POSITION

Mao's announced resignation from his past aa Chairman of the government, lo take effect thai spring, haa occasioned somess to his position In the party, although he remains party chairman- It Is conceivable that some of Mao's policies are under attack from within the partyoalition of Mao's lieutenants may now be strong enough to challenge his leadership if tbey choose. Tbere la evidence hi the Communist press lhal there have been divergent opinion* within the party during the past two or three yearsthe advisability of "Blooming andthe degree of risk the regime should accept In pushing Its foreign policy goals, and the optimum pace bo be set for economicMoreover, the leadership isnot unanimous on some questions of Sino-Soviet relationships, nor is it likely that there Is complete agreement over ways to meet the current difficult problem Incident to the leap forward aad commune prograroa

However, there Is no evidencechism within tbe party, nor can we Identify any group or clique which might be trying to oust

SECiTXT

from power. Instead, over the past year party statements have stressed Mao'srole In lending the party and Inmajor policies. The men lo the bestto oppose him are the very ones who are most strongly associated with the currently dcmlnant policies of the leap forward and the communes. Moreover,ising cliquethe party bad moved to supplant Mao io authority, their logical course would have been to remove Mao from his controlling post as party leader and retain the advantage of his popular prestige and symbolic value by kaep-Ing him tn the post of Chairman of the

herefore, we believe It more piety that Mao himself has tax en the initiative Inhis government post He probably desires more time to consolidate his leading positionommunist theoretician and to work on the manifold domestic and foreign problems facing the regime Mao hasbeen on record for atear as planning to relinquish his chairmanship. The Inherent powers of the government chairmanship are not great, and Itsla largely symbolic, so Mao Is notany significant power by relievingof the tlme-consurxring ceremonialof the office

ommunist Chinese leadership would probably be little affected by Mao'sfrom the government chalrrninahlp. He will almost certainly continue to be the boss of the party and of Communist China. Tbere Is no conclusive Indication as to has successor as government Chairman, though tt seems likely that this post will be filled by somebul teaser figure in the hierarchy who Isotential heir to Mao's party

IV, SINO-SOVleT RELATIONS

ven though the USSR haa alwaysconsiderable Irteceospeal variations tn Chinese Communis', domestic practices, the very facts of Chinese departures from the established Soviet economic pattern andof the communal organization ofconstitute challenges to Soviet doctrinal leadership. Moreover, the peremptoryand the ideological assertlvenesa with which the Chinese launched their commune program almost certainly caused the Soviet leaders considerable annoyance. Moscow may be perturbed by the unsettling effect within the Bloc of the rapidity and scene-times unpredictability of Peiping's domestic moves in the last two years: the "contradlc-Uons" thesis,0he aourtghUst drives, the leap forward, and the communea

a the doctrinal level, certain Chinese claims Id August and September stronglythat Peiping thought that tbe CPR was progressingore rapid rate than the USSR toward pure communism andthat Peiping had discovered the proper way of getting there. The somewhatfeatures of the new Chineseschemes almost certainly createfor Sino-Soviet trade negotiations,allocation of deliveries to China, the Bloc economyhole, and the degree ofleverage the USSR can exert on its sny. Also the rural emphasis of the Chinese programs may compete. In underdeveloped countries within and without the Bloc, with more orthodox Soviet schemes for the rapid industrialisation of society.

SO. The communes haveery cool Soviet reception. Moscow's commentaries have given tbe impression of downgrading the significance of the undertakingsnd MJkoyan have openly noted that the USSR's experiment with communes failed due to tack of economic incentives. The Sonets have re-emphasised their own rapid advance toward Communism and hare pointedly stressed the importanceigh level of economic productivityequisite for this transition.

he dominant reaction to the communes in Eastern Europe has also been cool There has been sentiment, especially among the Peace, lo the effect that the communethat the Chinese are "hard-Communists snd are pushing Moscow and challenging it for Ideological headship of the Blot Some Satellite Ccrnmunlst leaders are

s

aghast at tha communal uvntmn of Chinese aocieiy. Only tn Bulgaria baa than been any apparent acceptance of the commune idea, and even lo this case theresponse mayeflection oflor power within the party

ha Chinese Communists are probably miffed at the obvlouBness of SovietBat In the interests of Slno-Sovlet unity, as weU as for domestic reasons, they have backed off from Iheir Initial tdefategdesj asaerliveneas of last fall which carried the clear implication that Peiping wasMoscow in achieving communism. The Chinese Communists now stress thatmore progress tn production,many years to accomplish, wtu be necessary before Chinaurther gesture to unity theCommunists have recently given strong public tupport to the USSR's own claims that the Seven-Year Plan will accelerate progress toward communism within tbe USSR

he lesp forward and the ccrrrmunecould cause difficulties, some of anature, for Moscow over the long term. If theso prograrna fall, oommunlsm will to some degree be discredited In theworld,bey dismally fail, China's economic chaos may have adisrupting effect cm tbe Bloc economy and on Brno-Soviet relations. Conversely, If the programs succeed, they will contributerowth ln Communist China's capability for Independent soUonetouveof the Soviet position as the Ideological leader of world communism

owever, we doubt that Smo-Soeket trtc-tkms arising out of China's undertaking the leap forward and the communes will loosen the cement of common world alms andenemies. Khrushchev, while perhaps occasionally annoyed by Pelptnga mores, is realistically tolerant of Pelplags freedom of action. We do not feel that Mao, for hb part, will attempt to make his doctrines, or China, uppermost tn the Bloc. At the XXI Soviet Party Congress, both Kluniahchev and

Chou En-lal have stressed In unequivocal terms the "unbreakable solidarity" of the two countries, noting specifically thatto spin this alliance will fail Andebruary, Imraedlately after the close Of ths Congress, the USSR and Communist China announced their nine-year economic agreement

V. FOSEiGN POHCY

There Is no firm evidence as to theinterrelation between Communist China's domestic and foreign odventuroiianmoth were facets of an apparentto speed up revolutionaryprocesses, raping probably estimated that the activation of the crisis In theStrait would be useful in rallying the people to the leap forward and commune prograrna However, we do not believe that domestic eonsideraUons were the primary ffiolivst km tor China's foreign policyduring the year.

The basic cause of Communist China's truculence8 seemed toixture of confidence and Impatience; confidence In the Bloc's strength and what China's leaders felt was the Wests disarray, sad impatience to accelerate the prcrsssorldwhich had not as yet broughtChina the tangible foreign policywhich these leaden apparentlywere due their countryajor powar. The aasertlveness wtuch has marked Communist China's attitude irom about the time ofh Anniversary proceedings In Mcecow in7 was apparentlyby rapture over recent Soviet advances in science and vreapona technology, and by belief that Communist China faced the West in an area where the West is less powerful and less united and possibly less detenruned than it Is elsewhere Overt expression of impatience was directed to the Republic of China's continued control of Taiwan and the efisawn islands. US Influence bt tbe Par East, the development of "Iwo Chinas" sentiment In the world, and the representation of China tn the UN by the Taipei Government. We

SEC

tohat Unaand impatience, together with aCommunisl belief Lhat the time was ripe and that there was not much Lo tote by prob-ing, waa chiefly responsible for Pelplng'sof lb* Taiwan Strait crisis

The US and OBC response and worldduring the ceTsnore busnda crisis may hare had scene lerapering effect oneneral foreign policy thinking. Lsaa strata Ls being given to the alleged weekness of the US and more emphasis placed on theand "reasonable" nature of Chinese alms and policies In Asia. These considerations by no mean*orceful Chinese Communist move, especially one in response to soma target of opportunity. Chmesepolicy may continue to resemble something we might callhat U. the use of greaDy variedsoft or tough as the situation maybuteadrness lo push to adegree If necessary or opportune.

Specifically, it Is possible that Pelping might again encourage and support more forceful action by local Communist groups In such areas as Laos. Vietnam, and Indonesia. In the event ot Thai or Vietnamese hostilities with or attempted overthrow of Princein Cambodia, Peiping might respond to an InvltaUon to guarantee Cambodia or to lend volunteers China Is probably prepared to continue firm economic pressures against Japan, Malaya, Hong Kong, and Macau to achieve political objectives. Communist China wiH probably also continue sporadic military pressures In theStrait, such as shelllnga. occasional naval and air sorties,

'Bee 8NIF IDO-BSB, "ProbeUe DstilopmenU In the Taiwan Straitnd. 'Trobable Development* In the Taiwan Strait Crisla" and periodic reminders to Taipei of Chinese Communist military capabilities. Moreover, tho possibility should not be overlooked that Communist China might undertake major military action in the Taiwan Straitn any event, the leap forward andprograms will henceforth bateerstae relevance for Cornrrroriist China's laiagn relatione Then has already been some adverse Asian reaction to the social casta of the leap forward and communes If these programs fan dismally, communism wHJ tend to be discredited In Asia, and Communist China's ability to Influence other Asianwill be reduced, Taipei will beto think ageln of an early return to tht mainland. However, anything shortajor failure ba the leap forward andprograms will still leave the regimeosition to exert heavy pressures an its neighbors. If the keep forward and commune programs succeed, fear of Communist Chins wOl grow in South and Southeast Asia; and at the same time there la likely to bedisaatrsfaction wllhln these nations with the relatively slow rale of economic progress made by their regimes. Communist China's growing strength would make It more difficult to prevent small neighboring states such as Cambodia and Thailand from eccamraodaUng* Communist demands. Success will significantly augment the confidence ofeaden In their ability to presstoward their goals, both Oomestlc aod Icreign, and will strengthen their belief that basic Communist principles provide the only guide to those goals

of pro* ibtllUei In Iht Tartran StraitU being specific*IIt covered InS, "CWnei* Communist mienUooi andOovraw ot Aeaten la the Taiwan Strait Ana*

S

ANNEX

THE CHINESE COMMUNIST COMMUNE

Thr commune as it Is developing InChinaadical system ofsociety Into giant, semiautarklc cellstne highest degree of regimentation of human lift that has been seen in modern Tlmra The communespHp>Tl and unified local ndministration and have proved to be an effective means of exploiting the labor potential of the countryside. As patty VIce-Chalrman Uu Snaochl said,Everybody knows that thecommunes are no longer simplyof production among the people. They are organisers of the life of the people."

A2 Background of Comnianalfrafwn. The agricultural ptcgram of the Chinese Com-munlsts haseries of drasUe changes since tbe regime gained control of the country In 1MB. The first stage was tbe violent campaign of land re farm, which2 had largely stripped the landlords and the more well-to-do peasants of their land and parcelled it out among the poor peasants. Mutual aid teams quickly followed, and the first tentative moves toward co-operaU rtralioo were begun. At Mao Tse-tung's direction in the summerhe movement toward co-opera Uvea and "higher cooperatives"farms) began, and before the end6 nearly an of the peasants tn the country had been swept Into APC's

AS. The APC's were not popular with the peasants nor were they producing sufficiently to satisfy Peiping.umber of APC's dissolved and many more showed signs of wanting to follow suit The party tried numerous modifkatioos to stabiliseirective IB7 to reduce the son of the APCs to an optimum figure ofamilies This, of course,ove in exactly the opposite direction from that which was to be followed tn the commune program Just nine months later.

AA.omewhat parallel development, there wanew staleperation in which the land was owned by the state and the peasants had the status of wage-earnlng employees. As lata ashinese Communist propaganda was stillto the state farm as the highest form of agricultural organisation. This situation also was reversed by tben comnrunee, which proffered tbe rxxrrmune as the Ideal sod ultimate form of organization.

hus the Idea of the communes, which began to take shape in early 1PMnd universal policy tn August,ecided change In tha party line. It wasrastic change for the millions of peasants who had seen their lifelong dreams of becoming landowners so briefly gratified only six or seven years before.

ht Form and Punctkmtng of thtAlthoughercent of (he peasantry were reportedly herded Into communes byhe movement at stilltate of flux, and It Is difficult to generalise upon their characteristics. The discussion that follows attempts to emphasize those characteristics which appear lo be mostand most typical

y the end8 the communecoincided with tha htiang boundaries and Incorporated all of the former APC's of the area In the year or so preceding the ccsnmunaJIsatlon program, there were many mergers of htiang and the Dumber had been reducedohe Arfaae-elsed communes inouseholds each. The atiuiBeaiau and administrative machinery of the APC's

was complolely amalgamated with theinachinery of tha Astasia to form the administration of the commune Thus, all political, social, and economic respooslbillty and coDtrol is lodged In the rernrrmnf Thai larger/the tangle sod overlap of responsibility and authority which formerly prevailed at the local level.

Aft, Eventually, there mayove toward the Alien (county) as the proper aire for the commune. There wereria in October, but there ii some evidence that these wDl be merged ao that eventually there win beaif-million members each and largely self-sufficient except for soma heavy Industry and products that are restricted by geography.

Ad. Within the commune, the labor force is organised along military lines Into brigades. baUaUocs. companies, and various subunlta Their organ tacd man power is deposed ofthe direction of the commune chairman and the various functional departmentswhich the commune is operated. Work teams of appropriate arte are sent out to labor in the fields, or on industrial production, or In public works, as the occasion demands. Tbe commune provides labor not only for its own projects but also for such nationalas come within their range. Forapparently all of the grading andsrark for the new second track of the Tlentsln-P'u-k'ou railroad Is being done by the communes, each commune building the part that passes through Its territorya single commune the system ofmakes tt possible to call labor teams off other Jobs and quickly concentrate thousands of workers uponajor project.

Aid. Not only Is the work hard, but the hours are long, days off are few, and everybody work* The social services of tbe commune are designed to Increase the labor power of the unit The creches and bearding schools for children, the drab communal rnrssf-r. and the community housec leaning teams all serve to free the housewife for productive work in the fields, mines, and workshops The "happy homes" Into which the aged are segregated make It possible for teams of old folks toroductive days doing work within their pbyslcs! capabilities The school childrenart of tbe dayorulllabor, and even tbe preschool tots contribute by spending an hour or more par day prilling weeds or swatting rlies

All. Evan this extensive snd Intensiveof the available labor potential has not been sufficient to perform the accumulation of tasks that has developed upon theAlthough agricultural production at acknowledged by the parly to be "the central task of the people's communes at the presenthe recent drive to fulfill steelgoals and public works projects appears to have usurped some of the peasant laborneeded In autumn harvesting andwork. Some food crops have spotted In the fields and some cotton was not picked on time, and there were other signs of labor shortage.

ne of tbe typical and moatcharacteristics of the commune is theof payment to the memhera Onechange from the practice of the APCs Is that wages for labor performed are paidto the Individual Instead of to the head cf the family. This is ono of the ways In which the family unit Is being attacked. Tha focus of attention in the Chinese COmm unlet press, however, is the practice of giving themember bis share of the cvt"*iutmI income partly through wages and partly through what is called "freeages are paid to the Individual on the principle of "to each according to hishe system of "freeepresenting tbe principle of "to each according to his need" consists,of the public mass, scene degree ofhousing, clothing, and communallymedical care, weddings, and funerals. The "free" aspects of these goods and services, which are much publicised, do not necessarily mean that wages are any greater than before How to retain the economies and theadvances derived from the "free supply" system while keeping the wages Important enough so that their fluctuations can be used as an effective work incentive Is one of the problems worrying Peiping;

or Ibe cornrnunehole thepriorities for the distribution of Income have beenuaranteed share ol net income for the stateizable common reserve fund for the corrttnone, and the distribution of the remaining product to members of tbe cornrnune. The combined revenue Irom agricultural. Industrial, and cornmerctal at unties to the rural areas tt now collected by the eorrununes. After certainand operating expenses formerly paid local govern menl authorities aretbe quotas for payment of taxes and profits Into the budget are met, and theishe commune reserve funds.

ommon funds will be established, as formeriy in the APC's. to be used primarily for the expansion of production. The ability to accumulate large stuns of capital forIn agricultural, Industrial, andactivity Is one of the maincUlmed for corriaunsa. Public welfare funds are not lo exceed Ave percent of total commune income.

ducationesponsibility of theIn the larger communes this nowbeyond the secondary school level and this will presumably be the universal practice when the enlarged /turn sired communes are developed. Thus the commune will control the education of Its members from birth to burial Uniformity of educational content among the communes and proper adherence to the Communist line will be assured by party eorrtrol

Aie. An eaeentlal feature of the commune movement is theaThis was organisedrashthat coincided with the Taiwan Strait crisis and was partly Justified In propaganda by the warning that the country must beto meet "UShe main role of the mllltla program may. In fact, be nonmllltary, since it can substantially assist In the creationeneral atraoaphere of militancy and draxlPctae writer) ths Chinese CommunlsU desire. The mftilia may alao be of real value In tune, however,astof semi trained military reservesaa theecember party resolution stated, to "cooperate with the People'sArmy and at any time repfoniah It"

ll of the plans and operations of the communes are, Inr-ritably, monitored and guided by the Communist Party. The party organisation generally parallels theof the cornrnune down to at treat the tore] of the labor company. This tends to simplify party control and to streamline the lower-level organisation of the party as It does that of the local government and economy.

SEC^TT

JECJJET'

Original document.

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